Get Your Knoxville Chapter 13
Bankruptcy Case Confirmed
Unlike Chapter 7, which is basically a one-step process to wipe out debts, Chapter 13 is an on-going process in which you pay back your debts over a three to five year term. When you initially file your Chapter 13 case, a bankruptcy estate comes into being in your case. The Chapter 13 trustee is the administrator of this estate.
As the debtor, your obligation is to present a repayment plan that meets the requirements of the bankruptcy code. As your counsel, our job at Clark and Washington is to prepare and file this plan. As the debtor, you have to make this plan work in real life.
Chapter 13 Probationary Period
When we first file your plan, your case is in a probationary status. This probationary status will generally last 45 to 60 days - during this time you have to show that you can make this plan work. If you demonstrate that you can make your plan work, your bankruptcy judge will issue an order “confirming” your plan.
During the probationary period, we can expect objections to confirmation from both your trustee and from creditors. Do not take these objections personally - they arise in every case. Some objections arise from changes in your budget or job status that may have occurred after we filed. Sometimes the trustee will object because he wants more information or because bit of information was left off your petition.
Creditors generally object in an effort to squeeze you to pay a larger monthly payment into your plan. They may also object if your insurance lapses or for any number of other reasons.
Any objection to confirmation in your case must be filed early enough so that we have time to fix the problem. If we decide that the objection is bogus, we may take the issue to the judge. There are some issues that need to be addressed in every case and if you keep these factors in mind, you will have less problems with confirmation:
Your Role in the Chapter 13 Process
Funding - every case must be funded. Your obligation to pay the trustee begins immediately. We sometimes hear from clients who mistakenly think that their funding obligation does not start until after the 341 hearing, or after confirmation. NO. Your funding obligation starts immediately. If your case is being funded by payroll deduction, you are still responsible for all payments, regardless of what your employer does. If the payroll deduction does not start in time, you have to make up the payment. When you leave our office, you should have a very clear understanding of your payment obligations under your plan. Within a day or two after filing, we will have all the applicable dates and your attorney or one of our paralegals will be able to provide you with a case number and the mailing address for the trustee. If you make it your business to keep your case fully funded, everything else in your case will be a minor issue.
Insurance - if you have a house or motor vehicle that is subject to a loan, you need to maintain insurance on this collateral. If the insurance lapses, the collateral is at risk and your secured creditor will ask the bankruptcy judge to lift the automatic stay protection so the collateral can be repossessed or foreclosed upon.
Document production - bankruptcy has become extremely document intensive. You will need copies of income tax returns for the previous four years, copies of pay stubs for at least 6 months prior to filing, and proof of charitable contributions over the past year (if possible). You may also need to produce receipts for food purchases, medical costs and other monthly expenses. Get into the habit of saving receipts.